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To promote stable, constructive labor-management relations through the resolution and prevention of labor disputes in a manner that gives full effect to the collective-bargaining rights of employees, unions, and agencies.

This unfair labor practice case is before the Authority on
exceptions filed by the Respondents to the attached decision of
the Administrative Law Judge. The General Counsel filed an
opposition to the Respondents' exceptions.

The complaint alleged that Respondent U.S. Army Enlisted
Records and Evaluation Center, Fort Benjamin Harrison, Indiana
(EREC) violated section 7116(a)(1) and (5) of the Federal
Service Labor-Management Relations Statute (the Statute) by
refusing to bargain with the Union over the substance and/or
the impact and implementation of changes in the scheduled pay
day and in the time between the end of a pay period and the day
on which employees receive their paychecks ("pay lag"). The
complaint also alleged that Respondent Finance and Accounting
Office for the Secretary of the Army, St. Louis, Missouri (FAO) violated section
7116(a)(1) of the Statute by interfering with the bargaining
relationship between EREC and the Union when it implemented the
changes prior to the completion of bargaining.

The Judge found that Respondent EREC violated section
7116(a)(1) and (5) of the Statute by refusing to bargain over
the impact and implementation of the changes. The Judge also
found that Respondent FAO violated section 7116(a)(1) by
interfering with the bargaining relationship between EREC and
the Union when it implemented the pay lag and pay day changes
prior to the completion of bargaining.

Pursuant to section 2423.29 of the Authority's Rules and
Regulations and section 7118 of the Statute, we have reviewed
the rulings of the Judge made at the hearing and find that no
prejudicial error was committed. We affirm the rulings. Upon
consideration of the Judge's decision, the exceptions, the
opposition, and the entire record, we agree with the Judge that
Respondent EREC violated section 7116(a)(1) and (5) of the
Statute by refusing to bargain over the impact and
implementation of the changes in pay procedures and that
Respondent FAO violated section 7116(a)(1) by interfering with
the bargaining relationship between EREC and the Union. We
adopt the Judge's findings, conclusions, and recommended Order
to the extent that they are consistent with our findings below.

II. Background

Respondent EREC is an activity at Fort Benjamin Harrison,
Indiana. The Union is the exclusive representative of a unit
of approximately 185 employees of EREC. The Union also
represents five other units of different activities at Fort
Benjamin Harrison. The Union and EREC are parties to a
collective bargaining agreement covering the units that the
Union represents at Fort Benjamin Harrison. FAO provides
payroll services for approximately 85 activities, including
EREC.

This case concerns changes in pay procedures effected
throughout the Department of the Army. By memorandum dated
June 3, 1987, the Army announced that it was modifying Army
Regulation 37-105, Chapter 2-2, Finance and Accounting for
Installations, Civilian Pay Procedures. The modification
required all Army installations to adopt a 12-day pay lag for
their civilian employees. Prior to this time, the length of
the pay lag varied from installation to installation. In this
case, it was between 7 and 9 days. The modification also
required that all installations be on the same 2-week pay
period schedule so as to create a uniform pay day throughout
the Army. According to the June 3, 1987 memorandum, the
modification was to be implemented by January 2, 1988.

In a memorandum dated July 8, 1987, FAO advised EREC and
other activities that to comply with the regulation FAO would
begin implementing the 12-day pay lag and standard pay period
"on August 8, 1987 with full compliance by September 30, 1987."
Judge's Decision at 5. The memorandum stated that the pay lag
would increase by 1 day each pay period until it was 12 days
and that the change in the standard pay period "would occur
with a one week pay period . . . followed by pay periods of two
weeks[.]" Id. FAO set the date for full implementation on
September 30, 1987, rather than late December because its
representative was expecting new personnel and a 30 percent
increase in workload on October 1, 1987. FAO chose "to provide
a one week paycheck at first before the new standard two week
schedule commenced, rather than to delay for a three week
paycheck, in order to lessen the impact on employees of having
to wait an extra week" to get paid. Id.

The Union was notified of the pay lag and pay day changes
in a memorandum dated July 21, 1987 and it requested to bargain
over the changes. On July 31, 1987, the Union submitted the
following proposals:

Union Proposal No. 1

The Employers agree that they will mail/deliver
employees['] paychecks no later than 4 workdays after
the end of a particular pay period. Pay periods are
to mean the current 26 pay periods per year.

Union Proposal No. 2

Employees will not have to accept direct deposit of
their pay as a condition of employment but will have
one of the following options.

a. Employees will have their paychecks hand
delivered and receive Leave and Earning[s] statement,
etc., if they desire.

b. Employees may designate any address for the mail
distribution of their paychecks, leave and earnings
statement, etc.

c. Employees may have their paychecks deposit[ed]
and credit[ed] to their personal account in any
financial institution.

Union Proposal No. 3

If the Agency alleges non-negotiability of any of the
Union's proposal[s] on the basis of "Agency rules or
regulations" pursuant to 5 USC, Section 7117(a)(2),
no implementation of any part of the Agency proposals
will take place until a negotiability determination
[has been] made by the FLRA. The Union will move
promptly to request such a determination.

Id. at 6.

The parties met on August 10, 1987, in their only
bargaining session on the changes. Representatives from the
Union and Fort Benjamin Harrison met in a single bargaining
session. These proposals were intended to cover both EREC and
the other activities with employees represented by the Union.(1)

EREC declared that the first proposal "went to the
substance of the [pay lag] change and was not negotiable[.]" Id. at 7. EREC refused to bargain on Proposal 3 because "it
was a 'ground rule' and therefore already covered by the
existing collective bargaining agreement." Id.

As to Proposal 2, EREC asserted that it was "contrary to
an existing agreement" between the parties. Id. Specifically,
EREC asserted that the parties were bound by a 1982 Memorandum
of Agreement providing that employees were to "have their
paychecks mailed to either a designated mailing address or
credited to an account with a financial institution absent a
showing of 'genuine hardship.'" Id. at 4 (citation to footnote
omitted). As a result of the memorandum, "worksite
distribution of paychecks was discontinued[.]" Id. However,
EREC was willing to bargain on Proposal 2 "if the Union would
drop that part of the proposal which made hand delivery of pay
checks available to employees." Id. at 7. The Union "did not
agree that the [1982] agreement applied to EREC and, in any event, asserted
that the proposed change voided that agreement." Id. At the
end of the session, the parties agreed that they were at
impasse.

On August 13, 1987, EREC informed the Union that FAO would
begin implementing the changes on August 17, 1987. The Union
immediately filed a request for assistance with the Federal
Service Impasses Panel (FSIP). Sometime prior to August 17,
1987, EREC's Labor Relations Officer contacted FAO and
"requested that FAO delay the implementation until negotiations
were completed." Id. Notwithstanding EREC's request, FAO
began its implementation on August 17, 1987 and completed the
changes in October, 1987.

On November 16, 1987, the FSIP declined to assert
jurisdiction over the matter. According to the Union Vice
President, the 1-week pay period resulting from the
implementation of the changes "caused some employees to miss
their scheduled car or rent payments which resulted in late
charges being assessed" and that "[s]ome employees were also
short of money to prepare children for the new school year."
Id. at 8.

III. Administrative Law Judge's Decision

The General Counsel alleged that Respondent EREC violated
section 7116(a)(1) and (5) of the Statute by refusing to
bargain over the Union's proposals concerning the substance and
impact and implementation of changes in the pay lag and pay
period. The General Counsel also alleged that Respondent FAO
violated section 7116(a)(1) by implementing the changes while
negotiations between the Union and EREC were pending, thereby
interfering with the bargaining relationship between those
parties. The Respondents asserted before the Judge that there
was no duty to bargain over any of the Union's proposals and,
thus, they were free to implement the change.

The Judge dismissed the complaint as to Proposals 1 and 3.
However, the Judge found that Proposal 2, concerning paycheck
delivery, was negotiable and, therefore, that Respondent EREC
violated section 7116(a)(1) and (5) of the Statute by refusing
to bargain over Proposal 2. The Judge also found that
Respondent FAO violated section 7116(a)(1) by interfering with
the bargaining relationship between the Union and EREC when it
implemented the changes before bargaining on Proposal 2 had
been completed.

With respect to Proposal 1, which sought a 4-day pay lag,
the Judge noted the Respondents' claim that the Army's revised
regulation establishing a 12-day pay lag and uniform pay
periods was supported by a compelling need. Noting that "all
elements of a compelling need determination--including whether
a proposal is subject to or conflicts with an agency
regulation--must be resolved in a negotiability proceeding[,]"
the Judge concluded that the issue may not be resolved in an
unfair labor practice (ULP) proceeding. Judge's Decision at 9,
citing Federal Emergency Management Agency, 32 FLRA 502 (1988)
(FEMA). The Judge also noted that in National Association of
Government Employees, Local R14-89 and Headquarters, U.S. Army
Air Defense Artillery Center and Fort Bliss, Fort Bliss, Texas,
32 FLRA 392 (1988) (Fort Bliss), the Authority had considered
the negotiability of a similar proposal, also made in response
to the Army's regulation establishing the 12-day pay lag, and
had found it to be nonnegotiable.

As to Proposal 3, which delayed implementation of the
changes, the Respondents claimed that the proposal was
inconsistent with the new regulation because that regulation
called specifically for an implementation date of January 2,
1988. Because the Respondents claimed that the regulation was
supported by a compelling need, the Judge found that the issue
was not a proper one for resolution in the ULP forum.

However, with respect to Proposal 2, which sets forth
three options for receiving paychecks, the Judge found that the
proposal was within Respondent EREC's duty to bargain. The
Judge noted the Respondents' assertion that Proposal 2 "is not
a proper impact and implementation proposal as it has not been
shown how the proposal would address adverse effects of the
12-day pay lag[.]" Id. at 10. The Judge noted that "there
were numerous complaints of late and untimely checks both
before and after the change." Id. The Judge found that the
change in the pay lag "had an effect or reasonably foreseeable
effect on the working conditions of unit employees giving rise
to a duty to bargain." Id. In this regard, the Judge further
found that "[i]t is reasonable to conclude that lengthening
this period would trigger employee concerns over where and how
quickly they could have their checks in hand." Id.
Accordingly, the Judge found that the proposal "constituted
'appropriate arrangements for [employees] adversely affected'
under section 7106(b)(2) [sic] and (3) of the Statute." Id.

The Judge also noted the Respondents' claim that the 1982
supplemental agreement between Respondent EREC and the Union
"effectively waived [U]nion-initiated bargaining during the
term of the agreement" and barred negotiations over the
proposal because the supplemental agreement did not provide for
worksite distribution of paychecks. Id. The Judge found that
the 1982 agreement did apply to Respondent EREC. Id. at 4,
n.2. However, the Judge rejected the Respondents' claim that
the Union had waived its right to bargain on paycheck delivery
and held that by unilaterally changing the employees' pay day,
the Respondents were estopped from relying on the terms of the
supplemental agreement as a defense for refusing to bargain.
To allow the Respondents to do so, the Judge found, would
destroy the equality of bargaining envisioned by the Statute.
Therefore, the Judge held that whenever an agency exercises its
rights under the Statute to effectuate changes in conditions of
employment, the agency is obligated to bargain over any
legitimate union proposals bearing a substantial relationship
to the change, irrespective of prior existing agreements on
similar matters.

Further, the Judge noted the Respondents' contention that
the proposal directly interferes with management's rights to
assign employees and to assign work. The Judge rejected those
contentions, finding that the proposal "does not require
management to assign specific employees or specific duties to
particular employees and is not directly or integrally related
to the assignment of work." Id. at 12. The Judge also found
that the proposal "would not require the Agency to assign
duties that would not otherwise be assigned." Id.

As Proposal 2 was otherwise negotiable under Federal
Employees Metal Trades Council, AFL-CIO and the Department of
the Navy, Mare Island Naval Shipyard, Vallejo, California, 25
FLRA 465 (1987) (Mare Island Naval Shipyard), the Judge
concluded that Respondent EREC violated the Statute by refusing
to bargain over the proposal. Moreover, because Respondent FAO
implemented the changes before EREC had fulfilled its
bargaining obligation, the Judge found that FAO violated
section 7116(a)(1) by interfering with the bargaining
relationship between the Union and EREC.

With respect to the remedy, the Judge found that a statusquoante remedy was not warranted. Analyzing the factors set
forth in Federal Correctional Institution, 8 FLRA 604 (1982),
the Judge noted that reinstatement of the old pay procedures
"would be disruptive to unit employees" and "would also disrupt
the Respondent FAO operations which support numerous other
activities." Id. at 13. Accordingly, the Judge recommended
that Respondent EREC be ordered to bargain over the impact and
implementation of the changes in pay procedures and that
Respondent FAO "reimburse the unit employees for all monies
lost and/or interest charged as a result of the change at a
time when negotiations had not been completed." Id. at 14.

IV. Positions of the Parties

A. The Respondents

The Respondents except to the Judge's finding that
Proposal 2 was negotiable. In this regard, the Respondents
argue that the 1982 "[s]upplemental [a]greement [between EREC
and the Union] concerning paycheck distribution does serve as a
bar to negotiating over the Union's proposal to have work site
paycheck distribution." Exceptions at 3-4. According to the
Respondents, "if there is a waiver of union-initiated
bargaining there [is] no bargaining obligation imposed on the
Activity [EREC]." Id. at 5 (emphasis omitted).

The Respondents note the Judge's finding that when the
1982 supplemental agreement was negotiated, "there was a
specific time lag between the end of the pay period and the
delivery of employees' paychecks[.]" Id. at 5. The
Respondents state, however, that in making his conclusion, the
"Judge assumes, without benefit of testimony or documentary
evidence, that the pay lag was the same in 1982 as it was in
1987, and therefore speculates" that there was a relationship
between the pay lag and the method of distributing paychecks.
Id. According to the Respondents, "[t]he reality of the
situation is that the pay lag had nothing to do with the
Union's decision to sign the supplemental agreement in 1982."
Id. at 6. As there is a written, binding agreement stipulating
how paychecks will be distributed, the Respondents contend that
Proposal 2 is nonnegotiable.

Further, the Respondents argue that because "there is no
duty to bargain between the Activity Respondent [EREC] and the
Union, there can be no derivative duty imposed on the FAO to
recognize a bargaining obligation where non[e] exists
originally, or [where] it has been waived by a supplemental
agreement." Id. at 4. Therefore, the Respondents assert that
the Judge erred in finding that FAO violated the Statute.

Finally, the Respondents contend that the Judge's
make-whole remedy is contrary to 5 U.S.C. § 5596 (the Back Pay
Act) or is otherwise inconsistent with law. Specifically, the
Respondents argue that under the Back Pay Act, employees who
have established that they were affected by an agency unfair
labor practice are entitled only to payment concerning "a
withdrawal or reduction in pay, allowances, or differentials"
and not "interest charged the employee by a financial
institution." Id. at 8. As the Judge's recommended Order
required Respondent FAO to pay interest rather than "normal,
legitimate employee benefits in the nature of employment
compensation or emoluments[,]" the Respondents argue that the
remedy is contrary to the Back Pay Act. Id., citing U.S.
Customs Service, Chicago-O'Hare and National Treasury Employees
Union, Chapter 172, 23 FLRA 366 (1986) (Customs Service).

Aside from the Back Pay Act, the Respondents contend that
they are "barred by the decisions of the Comptroller General"
from making payment pursuant to the Judge's Order. Id. at 11.
The Respondents note that the Comptroller General found that
agencies were without authority to pay employees amounts for
earnings lost from their Thrift Savings Accounts due to
administrative error (68 Comp. Gen. 220 (1989)) and
reimbursement of check overdraft charges due to the agency's
inadvertent failure to deposit the employee's paycheck (60
Comp. Gen. 450 (1981) and Comp. Gen. No. B-228632 (March 10,
1988) (unpublished)), because such payments were not authorized
by statute or regulation.

The Respondents further argue that the Judge's decision
"contains no specific finding of any economic damages, or
consequential damages, from the implementation of the twelve
day pay lag" and that there was no "economic causal connection
between the change in pay lag and the incurred union employee
expenses which are currently speculative[.]" Id. at 10. In
this regard, the Respondent asserts that it was not foreseeable
to FAO that implementation of the changes would cause economic
harm and that "the Union employees were on sufficient notice to
adjust their debts and expenses based on the minimal
adjustments to effectuate the pay lag change." Id.

B. The General Counsel

The General Counsel argues that the Judge properly found
that Proposal 2 was negotiable. The General Counsel contends
that Proposal 2 is an "impact proposal" which might
"all[]eviate the impact of the changes and therefore, must be
viewed as related to the changes[.]" Post-Hearing Brief at 18,
19. In this regard, the General Counsel asserts that it "is
reasonable to conclude that a change in pay periods and/or pay
lag may reasonably affect how bargaining unit employees would
choose to receive their paychecks." Id. at 19. Moreover, the
General Counsel notes that the Authority has found that the
subject matter of the proposal--paycheck delivery--is
negotiable.

The General Counsel notes the Respondents' argument that
the "paycheck delivery proposal is non-negotiable because [the]
Respondent[s] view[] the proposal as [U]nion-initiated
bargaining, a right which [the] Respondent[s] claim[] the Union
has waived." Id. at 20. However, the General Counsel states
that its position is that "the paycheck delivery proposal is a
legitimate proposal within the context of management's
obligation to bargain over management-initiated changes" and
that there is no allegation in the complaint in this case
alleging that the Respondents failed to bargain "pursuant to
[U]nion-initiated bargaining." Id.

The General Counsel also notes the Respondents' argument
that there was no duty to bargain over the paycheck delivery
proposal because Respondent EREC "had previously negotiated an
agreement with the Union on this subject." Id. The General
Counsel rejects this argument because: (1) "there is
insufficient evidence to establish the existence of an
agreement which is applicable to the EREC bargaining unit"; and
(2) even assuming that EREC is bound by a supplemental
agreement, it "would be an absurd position" to allow management
to adversely affect employees by changing conditions of
employment and then use a previous agreement on the subject to
"preclude the Union from submitting proposals which would
alleviate [the] adverse consequences" of the change. Id. at
21.

The General Counsel also rejects the Respondents' argument
that "the fact that the actual pay lag at the time of the 1982
[s]upplemental [a]greement was not a part of the record is a
relevant 'fact' in support of [the] exception." Opposition at
2. Rather, the General Counsel maintains that the "absence of
that evidence is clearly irrelevant because the existence of
the supplemental agreement is irrelevant." Id. According to
the General Counsel, what is relevant is that "at the time of
the change at issue the pay lag was changing from nine to
twelve days." Id.

As to whether Respondent FAO violated the Statute, the
General Counsel argues that the Judge properly found that FAO
interfered with the bargaining relationship between EREC and
the Union when it implemented the pay lag and pay period
changes. In this regard, the General Counsel asserts that
Respondent EREC "had a duty to bargain" over Proposal 2 and
that "no exigency existed" requiring FAO to implement the
changes by October 1987. Post-Hearing Brief at 28, 29.

With respect to the remedy recommended by the Judge, the
General Counsel notes the Respondents' reference to the Back
Pay Act but argues that "[n]ot all monetary remedies for unfair
labor practices . . . are covered by the Back Pay Act."
Opposition at 4. Specifically, the General Counsel notes that
"monetary remedies not covered by the Back Pay Act are those
involving official time and travel and per diem expenses
related to union representational functioning." Id. (emphasis
in original).

The General Counsel states that "the Back Pay Act is not a
legal issue in the instant case[.]" Id. Instead, the General
Counsel contends that "the Statute itself authorizes" the
remedy in this case. Id. at 5. In this regard, the General
Counsel notes that under section 7118(a)(7) of the Statute, the
Authority may remedy an unfair labor practice through "a cease
and desist order, a bargaining order, reinstatement in
accordance with the Back Pay Act or 'such other action as will
carry out the purpose of this chapter.'" Id. (emphasis in
original). The General Counsel also argues that: (1) the
Comptroller General has recognized that, in the context of an
unfair labor practice case, "the Authority's remedial action
may require the expenditure of appropriated funds, even without
a formal finding of a violation"; and (2) the Authority has
previously upheld monetary remedies "not arising from the Back
Pay Act but authorized under the Statute as the result of
unfair labor practice violations[.]" Id. at 6.

The General Counsel notes the Respondents' argument that
actual harm to employees has not been identified, but contends
that "the resolution of disputes arising over actual losses is
a matter to be resolved during the compliance phase of the
Statute's unfair labor practice procedures." Id. at 7.
Further, the General Counsel distinguishes Customs Service,
cited by the Respondents, by noting that the "commuting
expenses [in that case] were found not to be reimbursable
because they are specifically excluded by Federal travel laws
and regulations." Id. at 9.

V. Analysis and Conclusions

A. Proposals 1 and 3

While no exceptions were filed with respect to the Judge's
conclusions on Proposals 1 and 3, we specifically do not adopt
the Judge's statement that the Authority would have found the
substance of Proposal 1--seeking to establish a 4-day pay
lag--to be nonnegotiable based on its decision in Fort Bliss.
Contrary to the Judge's statement, the Authority specifically
reversed its determination in Fort Bliss when it found
proposals seeking to maintain a 6-day pay lag to be negotiable.
SeeNational Federation of Federal Employees and Naval Air
Systems Command, Naval Plant Representative Office, St. Louis,
Missouri, 38 FLRA 1191 (1990) (Naval Air Systems Command); and
American Federation of Government Employees, Local 1698 and
U.S. Department of the Navy, Naval Aviation Supply Office,
Philadelphia, Pennsylvania, 38 FLRA 1016 (1990) (U.S.
Department of the Navy).

As the Judge's statement does not affect his conclusion
that the compelling need issues in Proposals 1 and 3 could not
be resolved in a ULP proceeding, and in the absence of
exceptions, we will adopt the Judge's conclusion that Proposals
1 and 3 are not properly before the Authority in this unfair
labor practice proceeding. SeeFederal Labor Relations
Authority v. Aberdeen Proving Ground, 485 U.S. 409 (1988) and
FEMA.

B. Proposal 2

We agree with the Judge's conclusion that Respondent EREC
violated section 7116(a)(1) and (5) of the Statute by refusing
to bargain over Proposal 2, but for the following reasons.

In Internal Revenue Service, Washington, D.C., 39 FLRA
1568 (1991) (IRS), petition for review filed sub nom.Internal
Revenue Service v. FLRA, No. 91-1247 (D.C. Cir. May 24, 1991)
the Authority set forth the approach to be followed in cases
involving an alleged statutory violation and allegations that a
collective bargaining agreement permits the action that is
alleged to constitute an unfair labor practice. The Authority
reaffirmed that "[t]he established approach . . . to resolve
defenses based on a collective bargaining agreement to alleged
interference with statutory rights is to determine whether the
charging party has clearly and unmistakably waived its
statutory right." IRS, 39 FLRA at 1574.

Applying that analysis to Proposal 2 in this case,
Respondent EREC had a duty to bargain over the impact and
implementation of its decision to change pay procedures unless
the Union clearly and unmistakably waived its right to bargain
about those matters. SeeDepartment of the Navy, Marine Corps
Logistics Base, Albany, Georgia, 39 FLRA 1060 (1991) (Marine Corps Logistics Base); U.S. Department of the Navy; and Naval
Air Systems Command.(2)

According to the General Counsel, Proposal 2 addresses the
impact and implementation of the Respondents' decision to
change the pay lag. That is, Proposal 2 is meant to constitute
a procedure for Respondent EREC to observe in exercising its
authority or an appropriate arrangement for employees adversely
affected by the exercise of the Respondent's authority under
section 7106(b)(2) and (3) of the Statute. SeeMarine Corps
Logistics Base, 39 FLRA at 1065.

As to whether the proposal relates to the changes in pay
procedures, we adopt the Judge's conclusion that Proposal 2
sufficiently relates to the impact and implementation of the
change in the pay lag. As found by the Judge, employees made
numerous complaints of late paychecks and "[i]t is reasonable
to conclude that lengthening this [pay lag] period would
trigger employee concerns over where and how quickly they could
have their checks in hand." Judge's Decision at 10. SeeU.S.
Department of the Treasury, Customs Service, Washington, D.C.
and Customs Service, Northeast Region, Boston, Massachusetts,
38 FLRA 770, 783-84 (1990) (U.S. Department of the Treasury).

As to whether the proposal is negotiable, we agree with
the Judge's finding that the proposal does not directly
interfere with management's rights to assign work and assign
employees. The proposal does not require management to assign
specific employees or to assign specific duties to particular
employees. SeeNational Federation of Federal Employees, Local
2099 and Department of the Navy, Naval Plant Representative
Office, St. Louis, Missouri, 35 FLRA 362, 367-68 (1990).
Moreover, as noted by the Judge, "the Agency's present policy
on paycheck delivery contemplates that duties related to the
hand delivery of paychecks will continue to be assigned to
Agency personnel." Id. at 12. SeeMare Island Naval Shipyard,
25 FLRA at 474 (proposal on paycheck distribution did not interfere with the agency's
rights to assign employees or assign work where the agency's
present policy contemplated that duties related to worksite pay
delivery would continue to be assigned to agency personnel).
Accordingly, we find that the proposal does not directly
interfere with management's rights, but constitutes a
negotiable procedure within the meaning of section 7106(b)(2)
of the Statute.

We further find that the Union did not waive its statutory
right to bargain over Proposal 2. We adopt the Judge's finding
that the 1982 supplemental agreement applied to the Union's
negotiations with EREC.(3) Moreover, we conclude that the
agreement does not bar negotiating over Proposal 2.

The 1982 supplemental agreement provides, in part, that
employees will have their paychecks "mailed to their designated
mailing address or for credit to an account with a financial
institution." General Counsel's Exhibit 7. The agreement
further states that "[e]mployees experiencing 'genuine'
hardship by the above requirement . . . may submit the facts to
their servicing F&AO and request an exemption." Id. Contrary
to the Respondents' assertion, nothing in the agreement states
that there will no longer be worksite pay delivery. As noted
above, the agreement provides for an exemption to the
prescribed methods of pay delivery. The agreement did not
eliminate worksite pay delivery. Under these circumstances, we
find that the Union did not clearly and unmistakably waive its
right to bargain about worksite pay delivery. See, for
example, IRS (the union did not clearly and unmistakably waive
its right to designate representatives); and U.S. Department of the
Treasury, 38 FLRA at 784-85 (nothing in the plain wording of
the agreement indicates that the union waived its right to
bargain over proposed changes).

Accordingly, we conclude that the parties' 1982
supplemental agreement does not prevent bargaining over
Proposal 2, a proposal addressing the impact and implementation
of the change in the pay lag.

Further, because Respondent FAO implemented the pay
changes before Respondent EREC fulfilled its bargaining
obligation, we find that FAO interfered with the bargaining
relationship between the Union and Respondent EREC in violation
of the Statute. SeeHeadquarters, Defense Logistics Agency,
Washington, D.C., 22 FLRA 875 (1986) (entities of the same
agency, but not in the same chain of command as the activity
with exclusive recognition, violate section 7116(a)(1) of the
Statute by taking action which conflicts with the bargaining
relationship between the parties at the level of exclusive
recognition). By interfering with the bargaining relationship
between the Union and Respondent EREC, we conclude that
Respondent FAO violated section 7116(a)(1) of the Statute.

C. Remedy

Sections 7105(g) and 7118 of the Statute vest the
Authority with broad powers to remedy violations of the
Statute. Seegenerally National Treasury Employees Union v.
FLRA, 910 F.2d 964 (D.C. Cir. 1990) (en banc). Specifically, section 7105(g)(3) provides that in carrying out its functions
under the Statute, the Authority may "require an agency . . .
to take any remedial action it considers appropriate to carry
out the policies of this chapter." Further, section 7118(a)(7)
specifies the remedies available in unfair labor practice cases
and includes "such other action as will carry out the purposes
of this chapter."

Pursuant to these provisions of the Statute, the Authority
has previously ordered monetary reimbursement for losses that
are not covered by the Back Pay Act when the losses resulted
from the agency's unlawful action and when such reimbursement
was not shown to be inconsistent with another law. See, for
example, U.S. Department of Labor, Washington, D.C. and U.S.
Department of Labor, Employment Standards Administration,
Boston, Massachusetts, 37 FLRA 25, 41 (1990) (reimbursement was
ordered for monies spent to pay for water coolers when the
agency ceased providing water coolers without providing the union with notice and an
opportunity to bargain about the change); Department of the
Army, Dugway Proving Ground, Dugway, Utah, 23 FLRA 578 (1986)
(reimbursement was ordered for increased expenses caused when
employees at a remote station were illegally evicted from
government housing).

In addition, the U.S. Court of Appeals for the District of
Columbia Circuit has held that the Authority may grant
make-whole relief to employees adversely affected by an
agency's failure to bargain over the impact and implementation
of a change in conditions of employment. Noting that the
Authority's role in adjudicating unfair labor practice cases in
the federal sector is similar to the National Labor Relations
Board's role in the private sector, the court stated that there
is "a weighty preference in favor of a direct grant of
individualized 'make whole' relief--especially in the form of a
monetary award--for losses actually suffered by employees."
American Federation of Government Employees, SSA Council 220 v.
FLRA, 840 F.2d 925, 930 (D.C. Cir. 1988).

As the Statute authorizes the Authority to exercise broad
powers in remedying unfair labor practices and as the
Respondents have cited no law precluding the Authority from
granting the Judge's remedy in the circumstances of this case,
we adopt the Judge's recommended remedy. We note that a direct
causal connection has been established between the Respondents'
unlawful action and the losses to employees. In this regard,
the Judge credited testimony of the Union's Vice President that
the implementation of the changes in pay procedures "caused
some employees to miss their scheduled car or rent payments
which resulted in late charges being assessed." Judge's
Decision at 8. Therefore, in addition to providing for a cease
and desist order, we will require Respondent FAO to reimburse
employees for the increased costs that they incurred when
Respondent FAO implemented the changes in pay procedures prior
to the completion of bargaining on Proposal 2.

We reject the Respondents' argument that the remedy is
contrary to the Back Pay Act or is otherwise inconsistent with
law. As we noted above, the Authority has ordered monetary
reimbursement for losses that are not covered by the Back Pay Act in situations where there was no showing that
such reimbursement was inconsistent with another law. We also
reject the Respondents' reliance on Comptroller General
decisions stating that the United States Government may not
reimburse employees for monetary losses when such payments
were not authorized by statute or regulation. The Comptroller
General decisions relied on by the Respondents do not apply to
this case because, as we stated previously, reimbursing
employees for their monetary losses in this case is consistent
with the broad remedial powers authorized by the Statute.

Moreover, we note that 68 Comp. Gen. 220 (1989), cited by
the Respondents, has been effectively overruled by the Thrift
Savings Plan Technical Amendments Act of 1990, Pub. L. No.
101-335 (to be codified at 5 U.S.C. § 8432a). In 68 Comp. Gen.
220, the Comptroller General found that agencies were without
authority to pay employees amounts for earnings lost from their
Thrift Savings Accounts due to administrative error. However,
the Thrift Savings Plan Technical Amendments Act of 1990
provides the statutory authority for payments by agencies of
lost earnings from Thrift Savings Accounts due to agency error.

Finally, we note the Respondents' claim that the remedy
is deficient because the Judge's decision contains no specific
findings on damages. However, we agree with the General
Counsel that disputes over actual losses to employees may be
resolved during the compliance stage of the proceedings in this
unfair labor practice case.

Accordingly, we adopt the Judge's remedy, except as
modified below.(4)

VI. Order

A. Pursuant to section 2423.29 of the Authority's
Rules and Regulations and section 7118 of the Federal Service
Labor-Management Relations Statute (the Statute), the
Department of the Army, U.S. Army Enlisted Records and
Evaluation Center, Fort Benjamin Harrison, Indiana shall:

1. Cease and desist from:

(a) Failing and refusing to negotiate in good faith
with the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit
of its employees, concerning procedures and appropriate
arrangements for employees adversely affected by the changes in
pay procedures.

(b) In any like or related manner, interfering with,
restraining, or coercing its employees in the exercise of their
rights assured by the Statute.

2. Take the following affirmative action in order to
effectuate the purposes and policies of the Statute:

(a) Upon request, negotiate in good faith with the
American Federation of Government Employees, Local 1411,
AFL-CIO, the exclusive representative of a unit of its
employees, concerning procedures and appropriate arrangements
for employees adversely affected by the changes in pay
procedures.

(b) Post at its facilities at Fort Benjamin Harrison,
Indiana copies of the attached Notice marked Appendix A on
forms to be furnished by the Federal Labor Relations Authority.
Upon receipt of such forms, they shall be signed by the
Commanding Officer and shall be posted in conspicuous places,
including all bulletin boards and other places where notices to
employees are customarily posted, and shall be maintained for
60 consecutive days thereafter. Reasonable steps shall be
taken to ensure that such Notices are not altered, defaced, or
covered by any other material.

(c) Pursuant to section 2423.30 of the Authority's
Rules and Regulations, notify the Regional Director, Chicago
Region, Federal Labor Relations Authority, in writing, within
30 days from the date of this Order, as to what steps have been
taken to comply.

B. Pursuant to section 2423.29 of our Rules and
Regulations and section 7118 of the Statute, the Finance and
Accounting Office for the Secretary of the Army, St. Louis,
Missouri shall:

1. Cease and desist from:

(a) Interfering with the bargaining relationship
between the American Federation of Government Employees, Local
1411, AFL-CIO, and the U.S. Army Enlisted Records and
Evaluation Center, Fort Benjamin Harrison, Indiana by effecting
changes in pay procedures at a time when the Activity and the
Union had not completed bargaining on the procedures and
appropriate arrangements for employees adversely affected by
the changes in pay procedures.

(b) In any like or related manner, interfering with,
restraining, or coercing employees of the U.S. Army Enlisted
Records and Evaluation Center, Fort Benjamin Harrison, Indiana
in the exercise of their rights assured by the Statute.

2. Take the following affirmative action in order to
effectuate the purposes and policies of the Statute:

(a) Reimburse unit employees for all monies lost or
interest charged as a result of the changes in pay procedures
that were effected at a time when negotiations on the changes
in pay procedures had not been completed.

(b) Post at the facilities of the U.S. Army Enlisted
Records and Evaluation Center, Fort Benjamin Harrison, Indiana,
where bargaining unit employees represented by the American
Federation of Government Employees, Local 1411, AFL-CIO are
located, copies of the attached Notice marked Appendix B on
forms to be furnished by the Federal Labor Relations Authority.
Upon receipt of such forms, they shall be signed by the
Director of the Finance and Accounting Office for the Secretary
of the Army, St. Louis, Missouri and shall be posted in
conspicuous places, including all bulletin boards and other
places where notices to employees are customarily posted, and
shall be maintained for 60 consecutive days thereafter.
Reasonable steps shall be taken to ensure that such Notices are
not altered, defaced, or covered by any other material.

(c) Pursuant to section 2423.30 of the Authority's
Rules and Regulations, notify the Regional Director, Chicago
Region, Federal Labor Relations Authority, in writing, within
30 days from the date of this Order, as to what steps have been
taken to comply.

C. The portion of the complaint alleging that the
Respondents violated the Statute by refusing to bargain with
the Union over the substance of the changes in the scheduled
pay day and in the pay lag is dismissed.

Appendix A

NOTICE TO ALL EMPLOYEES

AS ORDERED BY THE FEDERAL LABOR RELATIONS AUTHORITY

AND TO EFFECTUATE THE POLICIES OF THE

FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE

WE NOTIFY OUR EMPLOYEES THAT:

WE WILL NOT refuse to negotiate in good faith with the American
Federation of Government Employees, Local 1411, AFL-CIO, the
exclusive representative of a unit of our employees, concerning
procedures and appropriate arrangements for employees adversely
affected by the changes in pay procedures.

WE WILL NOT, in any like or related manner, interfere with,
restrain, or coerce our employees in the exercise of their
rights assured by the Federal Service Labor-Management
Relations Statute.

WE WILL, upon request, negotiate in good faith with the
American Federation of Government Employees, Local 1411,
AFL-CIO, the exclusive representative of a unit of our
employees, concerning procedures and appropriate arrangements
for employees adversely affected by the changes in pay
procedures.

This Notice must remain posted for 60 consecutive days from the
date of posting, and must not be altered, defaced, or covered
by any other material.

If employees have any questions concerning this Notice or
compliance with its provisions, they may communicate directly
with the Regional Director, Chicago Region, Federal Labor
Relations Authority, whose address is: 175 West Jackson
Boulevard, Suite 1359-A, Chicago, IL 60604, and whose
telephone number is: (312) 353-6306.

Appendix B

NOTICE TO ALL EMPLOYEES

AS ORDERED BY THE FEDERAL LABOR RELATIONS AUTHORITY

AND TO EFFECTUATE THE POLICIES OF THE

FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE

WE NOTIFY OUR EMPLOYEES THAT:

WE WILL NOT interfere with the bargaining relationship between
the American Federation of Government Employees, Local 1411,
AFL-CIO and the U.S. Army Enlisted Records and Evaluation
Center, Fort Benjamin Harrison, Indiana by effecting changes in
pay procedures at a time when the Activity and the Union had
not completed bargaining on the procedures and appropriate
arrangements for employees adversely affected by the changes in
pay procedures.

WE WILL NOT, in any like or related manner, interfere with,
restrain, or coerce employees of the U.S. Army Enlisted Records
and Evaluation Center, Fort Benjamin Harrison, Indiana in the
exercise of their rights assured by the Federal Service
Labor-Management Relations Statute.

WE WILL reimburse unit employees for all monies lost or
interest charged as a result of the changes in pay procedures
that were effected at a time when negotiations on the changes
in pay procedures had not been completed.

Finance and Accounting Office
St. Louis, Missouri

(Activity)

Dated: By:

(Signature) (Title)

This Notice must remain posted for 60 consecutive days from the
date of posting, and must not be altered, defaced, or covered
by any other material.

If employees have any questions concerning this Notice or
compliance with its provisions, they may communicate directly
with the Regional Director, Chicago Region, Federal Labor
Relations Authority, whose address is: 175 West Jackson
Boulevard, Suite 1359-A, Chicago, IL 60604, and whose
telephone number is: (312) 353-6306.

FOOTNOTES: (If blank, the decision does not
have footnotes.)

1. The alleged unlawful refusal of these other activities to
bargain is the subject of our decision, issued today, in
Department of the Army, U.S. Army Soldier Support Center, Fort
Benjamin Harrison, Office of the Director of Finance and
Accounting, Indianapolis, Indiana, 41 FLRA No. 77 (1991).

2. As noted above, under Naval Air Systems Command and U.S.
Department of the Navy, the Authority found that an agency has
the obligation to bargain over the substance and the impact and
implementation of its decision to change pay procedures.
However, Proposal 2 concerns only the impact and the
implementation of the Respondents' decision to change pay
procedures.

3. The General Counsel challenges the Judge's finding
"credit[ing] the testimony of [the Respondents' representative]
that the agreement does apply to EREC and has been applied to
EREC since 1982." Judge's Decision at 4, n.2. The demeanor of
witnesses is an important factor in resolving issues of
credibility, and the Judge has had the benefit of observing the
witnesses while they testified. We will not overrule a Judge's
determination regarding credibility of witnesses unless a clear
preponderance of all the relevant evidence demonstrates that
the determination was incorrect. We have examined the record
carefully and find no basis for reversing the Judge's
credibility findings. SeeDepartment of Housing and Urban
Development, Columbia, South Carolina, 21 FLRA 698 (1986).

4. In his recommended Order, the Judge directed that Notices
posted by the Respondents be signed by "an appropriate
official." The Authority's practice is to specify that notices
shall be signed by an official designated by the Authority
rather than one determined by a respondent. U.S. Department of
the Air Force, Headquarters, Air Force Logistics Command,
Wright-Patterson Air Force Base, Ohio, 38 FLRA 887 (1990). We
will modify the recommended Order accordingly.